Prospects of a quick recovery in the struggling mining sector in the latter half of 2012 appear dim, with many predicting an even worse performance in the next six months, according to a new survey from the Mining Recruitment Group (MRG).
In the midst of a volatile year for the mining industry, MRG's Executive Survey, released yesterday, provides insight into the direct effects the upheaval has had on the sector.
Of 140 mining leaders surveyed, only 22% of respondents thought that the mining sector would perform better in the second half of 2012 as compared with the first. Another 41% suggested it would likely perform worse.
When asked about their short-term (six-to-12 month) outlook on the overall strength of the mining industry, 38% said they were slightly to extremely bearish, 54% of executives held a neutral view. Only 8% of respondents were bullish over the same period.
However, despite the meagre short-term outlook, there was a marked difference on their perspective over a three-year period. Eighty-two per cent of respondents were bullish about the strength of the industry; only 5% were bearish.
In the current landscape, 71% of those polled said their companies have made a concerted effort to reduce overhead.
Of those focused on cost saving:
- 80% have scaled back on their exploration and development plans
- 64% have reduced their marketing and investor relations budget
- 20% have already begun laying off existing employees
- 24% have implemented organization-wide hiring restrictions 32% noted a reduction or elimination of incentive pay
- 8% have made salary cuts
Optimistically though, 76% of executives indicated they were not considering any further layoffs for the remainder of 2012.
However, most companies appeared effectively positioned to ride out current conditions, with 59% of those polled stating their company had a runway (months of cash remaining at their current burn rate) of more than nine months.
